Whether amalgamated company eligible to file refund claim?

PJ/CASE LAW/2015-16/2830

Case:-INDIAN OIL CORPORATION LTD. Vs COMMISSIONER OF S.T., MUMBAI-I

Citation:-2015(37)S.T.R. 575 (Tri.- Mumbai)

Brief Facts:-The appellant is in appeal against the impugned order rejecting their refund claim of service tax paid during the period 1-4-2004 to 31-8-2005.
The brief facts of the case are that appellant filed a refund claim on 24-12-2007 of service tax paid during the period June 2004 to December 2005 on storage and warehousing services rendered by M/s. IBP Ltd. on the ground that they are integrated company subsequent to the merger effective from 1-4-2004. The refund claim was denied on the premise that as the claim is time-barred and copies of TR6 challan submitted by the appellant did not reflect the refund amount. Moreover, debit note submitted have not indicated as to whether amount is in relation to M/s. IBP Ltd. Therefore, refund claims were not maintainable on merits.

Reasoning of Judgment:-The learned Tribunal heard both sides & considered the submissions.
In appellant's own case for the earlier period on identical issue reported in 2011 (23) S.T.R. 625 (T) has observed as under :
"6. I have carefully considered the submissions from both sides and perused the records. The amalgamation order issued by the Ministry of Petroleum is undisputedly dated 30-4-2007. However, the said order specified 1-4-2004 as the effective date of merger. Apparently, the process of amalgamation took considerable time and the same has been effected only by order dated 30-4-2007. Such retrospective approval does pose certain practical difficulties. The effect of the order is that from 1-4-2004, IBP ceased to exist as a separate company. That being the case, the transaction between IBP and IOCL during the interim period could not be treated as between a service provider and service recipient. As the order of the Ministry of Petroleum clearly mentioned 1-4-2004 as the effective date of amalgamation, notwithstanding the date of approval given by the Registrar of Companies being 2-5-2007, the specific date indicating the date of amalgamation as 1-4-2004 should be accepted.
The case of CCE, Chandigarh v. Nahar Industrial Enterprises Ltd. (cited supra) relied by the ld. SDR does not support his case. In the said decision. it has been held that when the Hon'ble High Court has given effective date which was different from the date of approval granted by the Hon'ble High Court, the former date should prevail. In the present case, the Ministry s order clearly specifies the effective date, which is 1-4-2004.
Therefore, the original authority's order rejecting the refund claim holding that the effective date for amalgamation is from 2-5-2007, cannot be approved, in view all the above, the Appellate Commissioner's order appears legal and proper. The decision of the Tribunal in the case of Technocraft Industries (I) Ltd. (cited supra) is also preferring to accept what is referred to as effective date which was different from the approval date. The other submission that the certificate has been surrendered on 4-5-2007 is also not relevant as on the said date both IOCL and IBP were present only as IOCL. IOCL has take over the assets and liabilities of erstwhile IBP w.e.f. 1-4-2004 in view of the amalgamation. Undisputedly the surrender formalities were also undertaken by IOCL. Therefore, IOCL is stepping into the shoes of erstwhile IBP have claimed the refund."
In the light of the above decision of this Tribunal, it was held that appellant have filed refund claim in time as the date of merger is with effect 1-4-2004, which was ultimately decided on 30-4-2007 and refund claim within a year i.e. 24-12-2007. Further, it was found that both companies have mated their merger. Hence, M/s. IBP Ltd. and appellant are the same legal entity. Therefore, they are entitled for refund claim.
With these terms, Tribunal set aside the impugned order and allow appeal with consequential relief.

Decision:-Appeal allowed.

Comment:-The crux of the present case is that the companies, if get amalgamated, then both such companies becomes Single Legal Entity. Hence, the refund claimed by the amalgamated company is allowable if the same is filed within the prescribed time limit of one year.

Prepared By:Meet Jain

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PJ/CASE LAW/2015-16/2830

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